From the WSJ.
Online Spending Growth Slows Sharply Amid Economic Gloom
Online retail spending grew only 1% in October from a year ago,
following a downward trend that started late last year, according to
market research firm comScore Inc. The spending slowdown is happening
as mid-to-lower income families that make less than $50,000 a year have
stopped spending online, the study says.
While households that earn $50,000 a year or more increased their
online spending, growth was slower than in previous years. Households
that have income of $50,000 to $100,000 a year account for 45% of
e-commerce dollars, and only increased their spending by 1% in the
three months ending in October.
"I think it's clear that consumers have less disposable income and
as a result, ecommerce is going to suffer," says Andrew Lipsman, a
senior manager at comScore. "I think it's safe to say we aren't going
to see growth rates anywhere near to what we've seen in past years."
The news doesn't bode well for large ecommerce companies such as Amazon.com Inc. and eBay
Inc. EBay last month reported quarterly revenue at the low end of its
forecast, as the San Jose, Calif., company announced layoffs of 10% of
its work force, or roughly 1,000 employees and 600 temporary workers.
John Donahoe, eBay's chief executive, has pushed a series of changes
across the auction Web site including increasing its share of fixed
price items for sale and offers of free shipping.
Amazon.com has fared better than eBay, but recently lowered its
full-year guidance and reported a wide revenue forecast for its current
quarter, indicating the Seattle-based company has limited visibility
into how it will perform during the holiday season.
Lazard Capital Markets analyst Colin Sebastian, in a note this week,
lowered estimates for Amazon's fourth quarter sales to $6.5 billion
from $6.6 billion, citing channel checks that indicated weak spending
online. "We note that the company remains in a period of high
uncertainty with slowing growth and declining incremental margins," Mr.
Sebastian said in the note.